Disclaimer 1 : If you don't have a vouch then you don't have a say. This is your chance to learn, not speak.
Edit : It's been a few days so vouch restriction is no longer. Pool is open if you want to have a swim.
Disclaimer 2 : For those of you who get to wear the special hat and can both buy and sell on both the bid and ask in whatever your preferred market is then the following does not apply to you, and you would already know and understand the following anyway.
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Yin
Forex = Zero-Sum
Reasoning... If one person buys it is because another person sold. If one person sells it is because another person buys. Volume shifts from one party to another. Money does not mysteriously appear or disappear. It is going somewhere and to someone/s. The brokers also, and ESPECIALLY.
Considering the movement of monies between all parties (buyer, seller, and brokers) then trading is zero-sum. Money is neither magically created nor lost, and all money that enters the market flows through the market and leaves the market.
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Yang
Forex = Negative-Sum
Reasoning... If I buy or sell, and the price does not change, and I then close my position without the price ever ever ever having changed at all I lose money due to the spread and broker fees. I'm always buying and selling at the worst price. Even if the price does change before I close a position I am still losing the spread. To break-even on a trade the price needs to move the distance of the spread in my favour, and every trade opened is immediately at a loss and will only become profitable after first moving in the desired direction the value of the spread plus 1 extra tick.
From the perspective of just the individual trader and this trader alone, then trading can only and IS only NEGATIVE-sum. Every position starts at a loss. Money placed into the market can not immediately be returned to the trader by closing the position because of the spread and the brokerage fees either embedded within the spread or as an external charge.
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Conclusion : It's all about perspective. Neither perspective will make you more or less profitable. In fact, knowing and understanding the above will do absolutely nothing for your account. Arguing about it is even less productive.
So, can we all just agree that it is all about perspective and from which viewpoint you consider the flow of money in relation to opening and closing trades? Please? As a whole, trading is zero-sum. In terms of a traders account then trading is negative-sum. Both are correct. Neither make a difference to anything.
Fin.
Edit : It's been a few days so vouch restriction is no longer. Pool is open if you want to have a swim.
Disclaimer 2 : For those of you who get to wear the special hat and can both buy and sell on both the bid and ask in whatever your preferred market is then the following does not apply to you, and you would already know and understand the following anyway.
-----
Yin
Forex = Zero-Sum
Reasoning... If one person buys it is because another person sold. If one person sells it is because another person buys. Volume shifts from one party to another. Money does not mysteriously appear or disappear. It is going somewhere and to someone/s. The brokers also, and ESPECIALLY.
Considering the movement of monies between all parties (buyer, seller, and brokers) then trading is zero-sum. Money is neither magically created nor lost, and all money that enters the market flows through the market and leaves the market.
-----
Yang
Forex = Negative-Sum
Reasoning... If I buy or sell, and the price does not change, and I then close my position without the price ever ever ever having changed at all I lose money due to the spread and broker fees. I'm always buying and selling at the worst price. Even if the price does change before I close a position I am still losing the spread. To break-even on a trade the price needs to move the distance of the spread in my favour, and every trade opened is immediately at a loss and will only become profitable after first moving in the desired direction the value of the spread plus 1 extra tick.
From the perspective of just the individual trader and this trader alone, then trading can only and IS only NEGATIVE-sum. Every position starts at a loss. Money placed into the market can not immediately be returned to the trader by closing the position because of the spread and the brokerage fees either embedded within the spread or as an external charge.
-----
Conclusion : It's all about perspective. Neither perspective will make you more or less profitable. In fact, knowing and understanding the above will do absolutely nothing for your account. Arguing about it is even less productive.
So, can we all just agree that it is all about perspective and from which viewpoint you consider the flow of money in relation to opening and closing trades? Please? As a whole, trading is zero-sum. In terms of a traders account then trading is negative-sum. Both are correct. Neither make a difference to anything.
Fin.
Congratulations ScalaFX for coming out of the closet!